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SEBI Board to Vote on Open-Market Buyback Revival June 19
India's SEBI board on June 19 will consider tougher open-market buyback rules: a 66-day execution window, 40% minimum utilisation in the first half, and promoter restrictions. The shift from the old 6-month framework changes the calculus for listed companies and shareholders.
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India's market regulator will vote on reintroducing open-market buybacks through stock exchanges at its June 19 board meeting, according to people aware of the agenda. The Securities and Exchange Board of India phased out that route in 2023 over tax concerns. A revival now comes with a belt of new restrictions.
The proposals, detailed in consultation papers from April and May, cut the buyback execution window to 66 working days from the previous six months. Companies would need to use at least 40% of the buyback size within the first half of the offer. Disclosures get stronger. Promoters and promoter-group entities cannot sell shares during the buyback period.
Stock-exchange buybacks give companies the flexibility to repurchase shares in the open market, absorbing supply and supporting the stock price. The pre-2023 version offered a wider window and fewer constraints. Under the new framework, companies will have less room to time purchases around market dips. The minimum utilisation rule compresses the execution schedule, reducing the benefit of waiting for a lower entry price.